Unrest continues for a second day in Karachi, Pakistan, Saturday after the assassination of Benazir Bhutto.

That's the burning question President Bush must contemplate as he tries to get some down time for the New Year's holiday.

He has a slew of foreign policy challenges to confront in 2008 -- ranging from Iraq to Afghanistan, Iran and North Korea to name just a few.

Perhaps none is as pressing on January 1 as the unfolding crisis in the wake of the assassination of former Pakistani Prime Minister Benazir Bhutto.

The stakes for the U.S. are enormous, from the fear of Pakistan's nuclear weapons getting into the hands of extremists to questions about whether President Pervez Musharraf is focused hard enough on the war on terror and hunting down Osama bin Laden.

The Bush administration finds itself in a box after sticking so long with the policy of standing by Musharraf's side at all costs, and it has little choice but to stay with him now, otherwise the White House would run the risk of making Pakistan even less stable.

So do not expect Bush's policy to shift much at all, despite questions about whether Musharraf has misused billions of dollars in U.S. aid intended to fight terror. "He has been an absolute reliable partner in dealing with extremists and radicals," Bush told CNN's Wolf Blitzer in November.

But with Musharraf's grip on his government slipping, the Bush administration had recently turned to what you might call "Plan B," a potential power-sharing pact between Bhutto and Musharraf.

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In the wake of Bhutto's murder, the U.S. faces a bunch of bad options, so the White House is now searching for what might be dubbed "Plan C" -- finding someone to unite a nation teetering on the brink.

"That's the key dynamic to watch now and that will determine whether Musharraf and others in the country can move ahead," said Daniel Markey of the Council of Foreign Relations.

One option is former Prime Minister Nawaz Sharif. The U.S. had kept its distance from him because of his connections to Islamist parties, but in light of the current disarray the Bush administration is taking another look.

Another option would be for the U.S. to scrap the goal of democracy and let Musharraf focus on cracking down on extremists. But Bush is committed to his "Freedom Agenda," spreading democracy around the world, and U.S. officials say they still want free and fair elections in Pakistan as early as next month.

The most acceptable option may be that the winner of the elections form a partnership with Musharraf. But finding someone to fill the Bhutto half of the partnership will obviously be a Herculean task.

Those elections are scheduled to take place on January 8, coincidentally the very same day Bush is headed to Israel for a mission that was supposed to focus on Israeli-Palestinian peace. But the issue of broader stability of the Mideast has suddenly shot to the top of that trip's agenda.E-mail to a friend